How did balance sheets become healthier?

Bank financing of firm investment has retreated in favour of equity financing

A rise in stock prices is synonymous with an improvement in credit quality. There has been a remarkable rise in stock prices from April 2020 onwards. Synonymous with this is the improvement in the credit quality of Indian financial and non-financial firms. For a very long time, the economy was tormented by the “the twin balance sheet crisis”, but now things are better. How did Indian banking get better? Three elements can be identified: Banks are less important in non-financial firm financing, investment by non-financial firms is subdued, and some of the economic stress of the pandemic may have not